Asian stock markets began the new week at 26 year lows and a sharply lower Dow futures market was a harbinger of more bad news domestically. And some of that bad news came from a new report on state government revenues.
The Center on Budget and Policy Priorities surveyed 15 states and the news was universally downbeat. Revenues for the quarter just ended were lower than in the same period in 2007 in the majority of surveyed states. When adjusted for inflation, total revenue collections are below last year's levels in all but one of the 15 states covered in the survey.
The median state experienced a 5.5 percent decline in total tax revenue after adjustment for inflation. The sales tax story was even worse. The report says, "Revenues are down in every one of those 15 states, with a median decline of 7.3 percent after adjustment for inflation."
The report says the numbers can be explained by the crisis in consumer confidence that is seen throughout the economy, and reflects the anxiety created by the loss of a half million jobs between September 2007 and September 2008.
The report's authors expect government service delivery to pay the price for the constitutional requirement on states to balance their budgets:
The hardest hit states among the 15 in the CBPP survey -- when adjusted for inflation -- are: Washington (11.3%); Tennessee (9.5%); Idaho (9.1%) and Virginia (9.0%). On a percentage basis, the country's largest states did moderately better -- with California experiencing a 6 percent decline and New York revenues off by a 1.3 percent.
The Center on Budget and Policy Priorities surveyed 15 states and the news was universally downbeat. Revenues for the quarter just ended were lower than in the same period in 2007 in the majority of surveyed states. When adjusted for inflation, total revenue collections are below last year's levels in all but one of the 15 states covered in the survey.
The median state experienced a 5.5 percent decline in total tax revenue after adjustment for inflation. The sales tax story was even worse. The report says, "Revenues are down in every one of those 15 states, with a median decline of 7.3 percent after adjustment for inflation."
The report says the numbers can be explained by the crisis in consumer confidence that is seen throughout the economy, and reflects the anxiety created by the loss of a half million jobs between September 2007 and September 2008.
The report's authors expect government service delivery to pay the price for the constitutional requirement on states to balance their budgets:
Many of the actions states take to balance their budgets will be harmful to families and to the economy. State taxes pay for state aid to K-12 schools, support for public colleges and universities, health coverage for children, families, seniors and people with disabilities, public safety, and transportation. States are enacting cuts in all these areas already. They are also increasing taxes and fees. Both spending cuts and revenue increases take money out of state economies, deepening the nation's economic problems.State finances have not been this tight since 2002 when states slashed spending on health care insurance and education. That could happen again this time around or, borrowing a page from Wall Street and the financial services sector, the federal government could step in with loans and a bail out package for political subdivisions.
The hardest hit states among the 15 in the CBPP survey -- when adjusted for inflation -- are: Washington (11.3%); Tennessee (9.5%); Idaho (9.1%) and Virginia (9.0%). On a percentage basis, the country's largest states did moderately better -- with California experiencing a 6 percent decline and New York revenues off by a 1.3 percent.
Subscribe to this blog's feed
Leave a comment